Fiscal Fitness: Women, do the math and take action

Here's a wake-up call, something for women to mull over approaching the tax deadline. In my home province of New Brunswick, and indeed it is the same story across Canada, the average income for women in their retirement years is less than two-thirds of the average income for NB men.

One factor is that the majority (71 per cent) of Canadian women who are at an age to be planning retirement – 45 to 64 years of age – don't have a financial plan, according to a recent TD Waterhouse survey.

The problem is not that we are financial illiterates. Canadian women make most of the decisions in household purchases and day-to-day finances.

Rather, the issue is that women aren't socialized properly about money. We don't learn that we should take charge of ourselves and our financial future. It must also be said that women are on average busier than men, with paid and unpaid family work.

Paying household bills is part of women's role of taking care of the family. But deciding to "pay ourselves first," or our RRSP, may be seen as selfish, by us and those around us, even if that's what will keep us out of poverty when we're older.

Many women don't pay attention to investing and financial plans until a life change is upon them. We are jolted into action when we are forced to retire or to take time out to care for a parent or an ailing spouse, or we become the only earner because our spouse died, is ill or we are separating.

Then we go find out about a financial plan. And then, we do a very good job at doing our homework and managing that plan.

"Study after study shows that women fare better than men in investing, mostly because men tend to buy and sell more than women do, and pay the price in trading fees," says investment blogger Noreen Rasbach. Kate Warne, Canadian market strategist for Edward Jones, agrees: "Once you're able to educate women to do it, then they're better investors than men. But it's getting them over the hump so that they feel comfortable that that's the right thing to do for their long-term financial success."

Part of being adult is thinking about our financial future and having a plan to keep out of poverty. Yet for some women, it's not that easy.

One key issue is about ownership of marital property. I wonder how many of the 32,000 or so women in my province who are in a common-law relationship think that when that union ends – by death or by separation – they will share equally in the marital property, including house, pensions etc.

There is a widespread but mistaken belief that long-term common-law unions are treated the same as marriage. They are not. Most often, women are the ones who suffer for that misinformation.

Another issue involves women's lower salaries. Less income means lower pension benefits and investments. Women's jobs more often do not offer private pension plans. Lower salaries also become one more argument in favour of women being the one to "sacrifice" her earning power in order to take parental leave.

Then there is the fact that women live longer than men – five years longer on average – and have to make our savings last. Furthermore, we marry people who are older than we are - which adds to the years when we will be living unattached. Some couples find that a substantial part of the family's savings is used up caring for the older spouse's health and nursing-home care.

Women therefore need to save more — 20 to 25 per cent more according to some financial experts.

Finally, some figures to bring it home: The average income of elderly women in the province in 2008 was $19,000, compared to men's $31,000.

Do the math, and take care of your future.

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Elsie Hambrook is the chairperson of the New Brunswick Advisory Council on the Status of Women. A version of this article appeared in the Moncton Times & Transcript.